Q4 NY Fed Report: Mortgage Originations by Credit Score, Delinquencies Increase, Foreclosures Remain Low

The NY Fed released the Q4 Quarterly Report on Household Debt and Credit this morning. Here are a few charts from the report.

The first graph shows mortgage originations by credit score (this includes both purchase and refinance). Look at the difference in credit scores in the recent period compared to the during the bubble years (2003 through 2006). Recently there have been almost no originations for borrowers with credit scores below 620, and few below 660. A significant majority of recent originations have been to borrowers with credit score above 760.

Solid underwriting is a key reason I’ve argued Don't Compare the Current Housing Boom to the Bubble and Bust, Look instead at the 1978 to 1982 period for lessons

From the NY Fed:

The volume of mortgage originations, measured as appearances of new mortgages on consumer credit reports and including both refinance and purchase originations, increased slightly with $465 billion newly originated in 2024Q4. …

Credit quality of newly originated loans was mixed. The credit scores of newly originated auto loans and mortgages were mostly steady, although there was some deterioration in mortgages, as the tenth percentile score of newly originated mortgage loans declined by six points.

Here is another way to look at the credit scores by origination over time. There was a significant decline in credit scores during the bubble.

Transition Rates for Current Mortgages

A possible concern is the increase in transition rates from current to 30-60 days late. This has been steadily increasing since mortgage rates increased and is now back to pre-pandemic levels.

Further increases would be a little worrisome.

And here is the transition to serious delinquencies. Most short-term delinquencies transition back to current, but there has been a slight increase in transitions to serious delinquencies.

Foreclosures Remain Low

Although the transition rate to serious delinquent is generally increasing, foreclosures remain historically low and well below pre-pandemic levels.

There is much more in the report.